Divis Labs share price hits 52-week high after Q2 profit jumps 45%

Divis Laboratories share price jumped over 4 percent at open on November 9 after the drug firm reported its September quarter numbers.

The drug firm reported a 45.63 percent rise in its consolidated net profit at Rs 519.59 crore for the quarter ended September 30, mainly on account of robust sales. The company had posted a net profit of Rs 356.78 crore for the corresponding period of the previous fiscal, Divi's Laboratories said in a filing to BSE.

Consolidated total income of the company stood at Rs 1,762.94 crore for the quarter under consideration. It was Rs 1,492.60 crore for the same period a year ago, it added. The company had near normal operations during the quarter, the filing said.

The stock was trading at Rs 3,374.60, up Rs 136.90, or 4.23 percent at 09:24 hours. It has touched a 52-week high of Rs 3,432.70.

Global reserach firm Jefferies has upgraded the stock to buy and has raised the target to Rs 3,772 from Rs 3,159 per share. It is of the view that the company's EBITDA was a beat driven by sustained revenue and higher gross contribution, according to a CNBC-TV18 report.

The research firm has upgraded FY21/FY22 EPS estimates by 14 percent/14 percent respectively.

Macquarie has maintained its outperform rating on Divis Labs with target at Rs 3,910 per share. It feels that the new capex of Rs 400 crore and resolution of Kakinada Logjam strengthen growth outlook adding that it is well placed to accept opportunities from higher pharma outsourcing to India.

The brokerage firm has raised FY21-23 EPS rstimates by 1-6 percent. The company is an attractive play on pharma outsourcing tailwinds for CRAMS and API segments.